Cable Retrans Reform Effort Falling Short

Broadcast lobbyists have been successful in knocking out two of the provisions from Senate legislation designed to hobble broadcasters' ability to negotiate for retrans payments. And as the legislation is reconciled with the companion House bill and moves toward final passage, it's unlikely to get worse for broadcasters and could become better.

The pay TV industry’s heavily lobbied retransmission consent reform campaign doesn’t appear likely to result in a major pummeling for broadcasters on Capitol Hill this year, but cable and satellite TV operators may score some gains that could hurt the ability of  broadcasters to negotiate future retrans deals.

The focus of the pay TV efforts to hobble broadcasters has been legislation aimed primarily at extending the ability of satellite TV operators to import distant broadcast signals in certain limited circumstances for five years.

The legislation is known as the Satellite Television Access and Viewer Rights Act, or STAVRA, in the Senate and the Satellite Television Extension and Localism Act, or STELA, in the House.

The pay TV lobbyists loaded the legislation with retrans reform extras, but have had mixed success in making them stick.

Broadcasters led by the NAB knocked out one provision in the Senate bill that would have forced stations to market their signals directly to pay TV subscribers, so-called “local choice,” and another that would have barred broadcasters from denying pay TV subscribers access to their online signals.

“STAVRA was dramatically improved with the removal of the broadcast-only a la carte idea and language that would have barred online program blocking,” said Dennis Wharton, a spokesman for the National Association of Broadcasters.


Even so, STAVRA continues to include a reform provision that also is in a House-passed version of the satellite TV bill that would bar TV stations in the same market from coordinating retrans deal negotiations, unless those stations are jointly owned.

In addition, STAVRA, unlike the House bill, would require the FCC to launch a rulemaking to “review and update” a key test for determining whether retrans negotiations are being pursued in good faith.

Also unlike the House bill, STAVRA would require the FCC to report annually on how much cable systems are paying for retransmission consent.

In addition, STAVRA, unlike the House bill, would bar stations from using retransmission consent agreements to limit the ability of cable and satellite TV providers to carry out-of-market stations that they are otherwise legally permitted to carry, including the so-called “significantly viewed” distant stations in their markets.

“NAB remains neutral on the STAVRA bill in its entirety,” said the association’s Wharton. “We’re waiting to see how the Senate and House resolve differences in the two bills. We still have concerns over language that bars broadcasters from jointly negotiating retransmission consent agreements with large pay TV providers.”

The good news for broadcasters is that STAVRA is likely to represent the worst-case reform scenario for broadcasters because the pay TV industry’s reform advocates don’t have the time — and are unlikely to be able to muster the votes — for a more stringent measure.

Assuming Senate approval of STAVRA, congressional leaders would still need to work out the differences between STAVRA and STELA in a conference before a final bill could be approved by Congress, and lawmakers aren’t supposed to add provisions to a conferenced bill that weren’t already approved in legislation by the House or the Senate.

Lawmakers are free to discard provisions in one or either of the bills pending in a conference, however. This means that the satellite TV bill expected to be approved before year’s end could even be made more palatable for broadcasters.

During the conference process, congressional leaders could delete STAVRA provisions from a new compromise bill or even include some provisions from STELA in the final bill that aren’t in STAVRA, including one provision supported by broadcasters that would give stations more time to divest joint sales agreements than would be allowed under current FCC regulations.

Under one possible scenario, broadcasters may even end up with a “clean” Senate bill that doesn’t include any retrans reform provisions.

That’s because Sen. Ed Markey (D-Mass.) is currently blocking a full Senate vote on STAVRA in an effort to fix what he sees as an anti-consumer, pay-TV-industry-backed provision in the bill that could prevent consumers from using their own set-top boxes to access pay TV programming.

Unless Markey drops his hold, the Senate could decide to opt for a clean version of the satellite TV bill instead, and that bill would then be the one used to create the compromise with the House’s STELA bill.

A cable TV industry source told TVNewsCheck that it was too early to predict exactly how the legislative battle will ultimately play out this year.

“Saying that the legislative battle is over now is like calling a horse race at the half-mile post,” the source said. “There’s still a lot of track left to cover before the finish line.”

While trying to influence the end game on retrans reform on Capitol Hill, broadcast industry lobbyists are also trying to limit the damage to the industry at the FCC, where Chairman Tom Wheeler has been raising concerns for broadcasters.

Wheeler has teed up a Sept. 30 vote on a proposal to eliminate the sports blackout rule — a regulation that bars cable operators from airing NFL games that have been blacked out on the local TV stations because the games aren’t sold out.

“It’s time to sack the sports blackout rule,” said Wheeler, in a Sept. 9 blog on the FCC’s website announcing the vote.

Wheeler has also been soliciting comment on whether to eliminate two agency rules that make it easier for broadcasters to protect the exclusivity of their syndicated the and network programming — the broadcasters’ key to negotiating for retrans payments.

Like the sports blackout rule, the syndicated exclusivity and network non-duplication rules effectively bar pay TV operators from importing broadcast signals into a market with the same programming as local stations.

Without the rules, broadcasters would still be able to protect the exclusivity of their programming, but would have to rely on the courts, instead of the FCC, to enforce the protections, adding to the hassle and expense for the broadcaster.

“It’s no secret that Chairman Wheeler is anti-broadcaster,” a broadcast lobbyist told TVNewsCheck. “He never misses a chance to praise broadband, but have you ever heard him say a positive thing about broadcasting?”

Comments (27)

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Wagner Pereira says:

September 24, 2014 at 12:41 pm

Poor Ted and Matt…..out maneuvered where it counts. All they do is post irrelevant comments on TVNEWSCHECK instead of working Congress where it really counted.

Manuel Morales says:

September 24, 2014 at 2:41 pm

Paging Matt Polka. Matt Polka to the red courtesy phone…

Don Thompson says:

September 24, 2014 at 2:47 pm

National Association of Cashcasters: “We hate the cable gatekeeper.” |||| Rockefeller-Thune Local Choice would eliminate the cable gatekeeper ||||| NAB: “We love the cable gatekeeper.” ||||||
Q: Has anyone invented a breathalyzer to test whether NAB can lobby in a straight line? |||||

Don Thompson says:

September 24, 2014 at 2:52 pm

If retransmission consent is the free market at its finest, why is Sinclair TV demanding that the FCC allow TV stations to take Comcast to arbitration to settle retransmission consent fee disputes? It would not surprise me if Sinclair demands the right to elect Local Choice on Comcast cable systems ||||||||||||||||||||| Please follow me on Twitter @TedatACA ……………….

    Wagner Pereira says:

    September 24, 2014 at 3:20 pm

    Looks like the NAB smacked down the ACA. Considering the time you and Matt waste here, why am I not surprised?||||||||||||||||||||| Please follow me on Twitter @NotTedatACA ……………….

    kristin serman says:

    September 24, 2014 at 9:12 pm

    I wouldn’t be proud of it to me it’s what is wrong with this country corporate and special interests greed at it’s finest. With us the consumers once again getting screwed. If this system is so great why is more cords being cut???. I will tell you why because the current system is a DINOSAUR!!!. It’s old and outdated.
    Why are you folks so against choice and free markets having an open system that will bring in more consumers. All this will continue to do is continue with the blackouts which keep occurring more and more and the rates continue to rise. The NAB shouldn’t be celebrating they should be ashamed because they are the ones who want to keep the consumer and choice held down.
    So they can keep being more and more greedier for content that for the most part STINKS.

    Wagner Pereira says:

    September 24, 2014 at 9:30 pm

    Currently, cord cutters account for 0.1% of the American Households. Get back to us when its over 1%. BTW, if you read TVNEWSCHECK last week you would have seen the E&Y report that the Margin of Cable Systems are over 40 cents on the dollar, while the margins of TV Stations are in the high teens.

    kristin serman says:

    September 24, 2014 at 11:08 pm

    Right NAB spin that must be why Broadcasters fees and profits have hit record highs but yet that still isn’t enough for folks that support the Broadcasters . They want to take what little money we have left because it’s just not enough for them. But yet give us dumb reality shows, shows like The Talk, The Chew,
    The View that are boring as watching paint dry, no longer has network shows for the family instead puts tv that has a lot of violence , adult content and language in it. That is why you are losing viewers high cable fees, and bad content. Also this bad system we live in with no choice, no innovation etc..
    That is why your trying to protect it and instead of work with the cable/satellite firms to fix this mess.
    Because you want even higher fees and revenue because record revenue isn’t enough for you folks while give us more dumb reality shows and the dumb talk shows I mentioned.

    Wagner Pereira says:

    September 25, 2014 at 4:18 am

    Broadcast fees have set record highs because they were not given anything for the past 40 years. With all due respect, when Lincoln liberated the Slaves in the 1860s, if they were paid 25 cents a day, that was also a record high. As for high cable fees, again, take it up with the Cable Systems who have a margin of over 40 cents on the dollar instead of Broadcasters who’s margin is less than 20 cents on the dollar. You do understand what that means don’t you?

    Maria Black says:

    September 25, 2014 at 1:20 pm

    The content is driven by ratings, so if you’d like content to “improve” by your standards (less violence and adult language) work on improving how the TV industry gets its ratings. When every home is a Nielson home, you’ll get the real numbers on what content people prefer.

    John Bagwell says:

    September 25, 2014 at 11:23 pm

    This coming from the person with no knowledge of the business and who thinks CBS is the same as the CW and TNT.

    kristin serman says:

    September 26, 2014 at 10:31 pm

    Right. The content is driven by how low you want to lower your standards to create the shock factor to get people to tune in because they like people acting juvenile , outrageous doing things to get themselves noticed. If I wanted that I would listen to Howard Stern or something as juvenile as that.
    People want real family tv like we used to have with the Cosby Show, Full House, Home Improvement shows that were very popular for the family now we are promoting the Snooki’s, Situations, and Real Housewives of everywhere, Survivor This, Survivor there, Big Brother 45 etc,. In every dumb reality show you broadcasters can put together that creates the shock factor for the audience so they will keep tuning into this garbage. Well it doesn’t sit well with most folks because we see it for the junk that it is .

    kristin serman says:

    September 26, 2014 at 10:43 pm

    This coming from a NAB shill who thinks we want to keep paying for this junk that you call popular. Who wants to watch reality shows , talk shows, cooking shows etc.. People want to watch real programming how can you get families to watch shows that are violent, vulgar language, shows nudity , adult behavior.
    That is what is turning families off from Network Shows because they are not getting the product they are used to it has become a product that sells to the lowest common denominator that creates shock factor that gets the Howard Stern and Jerry Springer types to keep tuning in.

    Wagner Pereira says:

    September 26, 2014 at 11:55 pm

    You can find the programming you claim you want on the Digi-Nets for free. Suggest you look there. If people wanted what you claim, then it would be on TV. If the masses want it, even if its Pigs Snorting for 60 minutes, if you could get 2% of the population watching it, it would be on TV.

Clayton Mowry says:

September 24, 2014 at 4:24 pm

The Cable Industry should audit their channels and eliminate about 2/3 or the mindless stuff they force down subscribers’ throats that were invented by the cable industry to pad the bill. Then they can afford the programming that people want to watch. Poll your subs ACA, they don’t want most of what you force on them!

    Don Thompson says:

    September 24, 2014 at 4:49 pm

    When are you going to learn that the programmers are the ones that force content on the cable operators, particularly the smaller ones that commenters here so joyously ridicule |||||||||||||||| Retransmission consent is a regulatory ebola breakout designed to kill off the petri dish of bacterial colonies desperate for real TV Freedom ||||||||||||| Local Choice is the answer and I fully expect it to grow “like wildfire,” as Sen. Rockefeller put it the other day. |||||||||||||||||| Please follow me on Twitter @TedatACA

    kristin serman says:

    September 24, 2014 at 9:18 pm

    Actually they don’t want reality shows on Network tv either. They also want a system where we can pick and chose what channels we want an open unregulated free market system no more foolish DMA areas that deprives folks of their channels. No more retrans and blackout nonsense that makes us consumers outraged.
    We should have an open system that allows us to drop the channels we don’t like such as religion, shopping, discovery, tennis, sportsman, horse racing etc.. While allowing us to choose where we want our network stations from and as many areas we want allowing us to see larger market stations.
    Also allowing National Network Feeds of Network Channels so folks who don’t want local programming can just have the network shows, network sports, nightly news and filler programming.
    So I think it’s not the cable industry that is the problem they want change it’s the broadcasters who want to stay in the Dinosaur era with terrible programming as of late.

    Wagner Pereira says:

    September 24, 2014 at 9:32 pm

    When you get TRUE A LA CARTE, not the “Local Choice” Red Herring that the ACA is peddling, you will find that you will pay the same on your cable bill for 10 channels instead of several hundred.

    kristin serman says:

    September 24, 2014 at 11:00 pm

    Right I think Local Choice would be the beginning of true a la carte but yet we can’t even have that because the greedy broadcasters think we want the current system. Explain if it’s such a great system why are folks going to alternatives like ROKU, Appletv, Online Streaming of content. I will tell you why because the current system doesn’t allow choice , doesn’t allow innovation, doesn’t allow unbundling of channels , doesn’t allow national network feeds with no local content just network shows etc..
    If folks could have the opportunity to pick and choose the channels and content they want they would be very satisfied consumers. But instead our rules which are worse than Canada and other countries we can’t have 21st Century Television and Communications system that puts the consumers ahead of the BROADCASTERS, AND Cable/Satellite firms. Give us not local choice as some wants but give us Unlimited Regional Choice, Unbundling of channel packages let us pick and choose channels we want.
    But also price controls on the channels and innovation in cable/satellite boxes etc..
    That is what we have been demanding for years now but it goes on deaf ears because the corporate and special interests groups run Washington. Not the People anymore.

    Wagner Pereira says:

    September 25, 2014 at 4:16 am

    Again, Broadcasters only want equality. You cannot have a 2 tier system. And you want price control? Sorry, you lost that with a la carte. a la carte is all about supply and demand – and when you pay what you pay now for 10 channels, just remember, you got what you wanted.

    kristin serman says:

    September 26, 2014 at 11:01 pm

    You can achieve major changes but you folks are opposed to any choice system you want to keep things outdated . I ask all of you how can you get new consumers to want in if you keep a system that was good 30 , 40 , 50 years ago but not today to keep it going if they don’t want it. These folks are switching to Roku’s, Apple TV , Online Streaming etc.. The Broadcasters and Networks are going to keep losing money unless something is done. To get fee hikes for the channels doesn’t work you have to have a system and packages that gets folks enticed to want to sign up for Cable and Satellite.
    But to say nothing is wrong with the current system is just pure bunk and sheer lunacy when folks are dropping their cable and satellite subscriptions each day.

Manuel Morales says:

September 25, 2014 at 7:31 am

Goon you are not proposing a free market scenario. Broadcasters are contractually restricted (as far as network and syndicated programming goes) to their DMAs. A contract is the essence of a free market. You are proposing a system whereby the Government acts to invalidate those free market contracts. Furthermore moat broadcasters would be fine with true a la care where every channel is offered a la carte but again Local Choice is discriminatory in that it singles out OTA channels. Again, not free market. Nor is government mandated a la carte. Anything where the government injects itself (all of your proposals) is not free market.

    kristin serman says:

    September 26, 2014 at 10:55 pm

    Actually I think you can build to a true free market system by starting with Local Choice then move opening up the rules for network stations by eliminating DMA rules, exclusivity rules, rules on allowing providers being allowed to carry out of market stations etc.. Allowing folks to get their network stations from anywhere they want and as many network stations from any area as they want. Then move to unbundling all of the channels that are out there then let the folks build the packages they want the way they want them.
    Have the FCC set a reasonable fee price a flat rate for each channel so it’s consumer friendly even capping the price of the channels so you don’t get huge fee hikes that we have seen that has led to all of these blackouts. Also have the price capped of the cable/satellite boxes so the folks rates aren’t being raised each year as has been done. I have seen it with Cable, Directv, Dish. I have also stated folks should be allowed to get National Network Feeds in the case they don’t want local affiliates just the network shows, network sports, and nightly news with filler programming thrown in. I think there is enough demand out there for this but we keep hearing it’s no good , local choice won’t work every excuse tossed in.
    How do we know what any system will work if it’s just local choice, total free market, a la carte etc..
    Since nobody will let us try it all we hear is the same folks keep defending this DINOSAUR that is outdated that is causing heartburn for everyone who is a consumer like myself. All we hear from NAB, that the current system needs to stay why because the Broadcasters need more money are you kidding.
    We also hear that providers are against it which is pure bunk since they want to change the current set up as well. I think we need to move into the 21st Century and head towards the Mid 21st Century with new rules and laws because they are so outdated things are way different than they were 20 , 30 , and 40 years ago.

    Wagner Pereira says:

    September 26, 2014 at 11:54 pm

    DMA rules will never go away until CBS/NBC/ABC/FOX end up online instead of over air. People that own the content demand the DMA rules. You CAN get around DMA rules by purchasing Season Series on Amazon or iTunes for anywhere from $20 – $35 for the Season. That is what it costs PER SHOW if you want it outside of DMA restrictions and that is what the Providers/Producers want to charge. And un-bundling will not happen unless it is for everyone – not just local station. Sorry you do not like reality, but that is the way it is.

Clayton Mowry says:

September 25, 2014 at 1:16 pm

Ted, that is BS and you know it. So ESPN and AE are forcing 35 shopping channels down your throat. I have worked on the cable programming side, it is nearly a cartel, just try to get a new channel on the cable. Why don’t you be transparent and talk about how many cable nets have equity held by cable co’s?

Clayton Mowry says:

September 25, 2014 at 1:18 pm

Further, ACA and the cable industry fears a la carte. If broadcasts did not have the right to withhold the programming they would get nothing from the cable monopoly, which is less of one these days with satellite, Uverse and Fios. IF broadcast programming had no value, why did TWC cave to CBS? Because they were losing subscribers at an alarming rate. The public is not required to get their TV through an MSO. It is a convenience and if local TV did not support the cable business model, then drop it and see how that works out.

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